Brent Rises as US-Iran War Intensifies

Brent crude climbed more than 4% to above $108 a barrel on Monday, recovering from a 2.1% decline in the previous session as uncertainty surrounding US-Iran diplomacy kept supply risks elevated. Tehran continues to support a proposal that US President Donald Trump has rejected, calling for the lifting of a US naval blockade and oil sanctions as conditions for reopening the Strait of Hormuz. Iranian Foreign Minister Abbas Araghchi said these requirements were longstanding and that Washington would need to make concessions. However, Trump said talks could resume this week. Oil markets have remained volatile as hopes for progress repeatedly give way to renewed uncertainty during the conflict’s eighth month. Regional tensions also persisted, with Saudi-led coalition forces reporting the interception of Houthi drones heading toward Riyadh and a missile aimed at Khamis Mushait, while alerts were issued around Abha and Jazan, where Aramco facilities are located.

Brent crude climbed above $107 per barrel on Monday, recovering losses from the previous session after President Donald Trump rejected Iran’s latest proposal to reopen the Strait of Hormuz, raising concerns that the restoration of oil flows through the critical waterway could face further delays. Trump also said Tehran had overplayed its hand and expects negotiations to resume this week. Meanwhile, Iran said it is waiting for a definitive US response to its seven-day proposal to reopen the strait and other demands, adding that it will not ease its conditions after Trump rejected Tehran’s latest plan. Elsewhere in the Middle East, tensions remain high as Saudi Arabia intercepted Houthi drones heading toward Riyadh, along with a missile targeting Khamis Mushait in the south. Alerts were also issued in Abha and Jazan, where Aramco operates energy facilities. In the US, Trump is considering a ban on diesel exports as part of efforts to address elevated fuel prices.

Brent crude eased to around $104.5 a barrel on Friday after Iran called on the US to return to an interim peace deal that failed to end the war over the summer. The agreement would resemble the memorandum of understanding reached by the US and Iran in mid-June, which led to a fragile ceasefire that collapsed weeks later. Iran’s foreign minister proposed reopening the Strait of Hormuz and resuming nuclear talks with the US within seven days if the Trump administration accepts its conditions, including lifting the naval blockade, unfreezing Iranian assets, and ending the war “on all fronts.” Oil flows through Hormuz reached 33.7 million barrels this week, putting exports roughly on track with the previous week’s levels. Oil markets have remained volatile this week amid mixed signals over peace prospects, signs of recovering Middle East energy flows, and speculation that the US could restrict diesel exports. Brent crude remained more than 1% higher for the week.